customer retention

3 Reasons Your Customer Retention Strategy Sucks (and How to Fix It)

“A bird in the hand is worth two in the bush.” – Proverb

What the old adage above demonstrates is that we’ve known for a long time that it is better to hold on to what you have than to test uncertainty to gain more. However, you wouldn’t know it from many businesses’ customer retention strategies.

Why is it so important to keep the customers you have, you ask?

It all comes down to numbers. Via Hubspot, we learn that the Harvard Business Review has found that acquiring a new customer can cost anywhere from five to 25 times what it does to keep an existing one. According to Jerry Jao on CMO.com, you only have a 5-20% chance of converting a new customer but a 60-70% chance of making a sale to an existing customer. Existing loyal customers are more likely to refer new customers to you.

That’s the value of a bird in the hand.

All of this is to say that if you are forsaking your current customers when you’re chasing down new leads, you need to stop. ASAP.

Here are three reasons your customer retention strategy might be failing.

You’re Not Managing Expectations

From the very beginning of your relationship with your customers, you need to manage their expectations. You’re going to have to walk a line between offering them something of value so that they choose to work with you and not overpromising.

When setting customer expectations, be realistic. Keeping expectations reasonable will allow you to not only deliver on your promises but also to go a step further.

You’re Not Getting (or Perhaps Just Ignoring) Customer Feedback

How can you know if your customers are unhappy if you never ask them? Every business has areas where they can improve when it comes to customer retention and loyalty. It’s better to face your shortcomings and try to remedy any problems before they lead to a lost line of revenue.

You’re Not Incentivizing Loyalty

You have a few ways that you can encourage loyalty in your customers. One way is to show that you are driving value for them. No matter whether you sell a service or product, if what you’re doing isn’t offering more value than it costs, you’re going to be a victim of the bottom line.

If you are already proving your worth to your customers but still need a way to encourage loyalty, you can continue building up your relationship by giving them access to special offers—limited sales, free content that offers real value, and loyalty programs are a few starting places.

Is Your Customer Retention Strategy Failing Your Business?

It’s so much more cost-effective to keep customers loyal than it is to find new ones. If your business’s customer retention is falling, it’s time to act. By using the information above and applying it to your situation, you can turn around the results that you’re driving to reflect the brand loyalty that you deserve.

Start building these strategies into your business today so that you can hang on to your customers and attract new ones.